The Evening Of Idols: Lining's 4 Year Down Line

Pressing the gourd to float the ladle, the Li Ning Co is deeply trapped inside and outside. In July 9th, the Li Ning Co confirmed that it had received an email notification from LN PLUS IBEROAMERICA S.L. in July 4th this year, and filed for bankruptcy because of the deterioration of the Spanish market environment and its poor management. Li Ning Co stressed that the company is the authorized group of Spain, rather than the Lining Spanish subsidiary.

4 days ago. Lining According to the announcement in the port, Zhang Zhiyong, the CEO of the division chief executive, left office for 10 years. Lining, executive chairman of the board of directors of the company, went to the front desk. He was responsible for external affairs and relations before he hired the new chief executive officer. He acted as executive vice chairman of Dezhou Pacific Group partners, and was responsible for internal affairs and operations. His operation team entered the company two months ago.

In the past two years, the adverse news about the Li Ning Co has not been broken. With Zhang Zhiyong's departure, the brand reshaping campaign launched two years ago by the Li Ning Co also failed.

Can the change of the chief executive of the company change the fate of Li Ning Co? A former Li Ning Co insider said, "for Li Ning Co, it is not the end of a tragedy, nor the beginning of a great drama, but a positive new number."

Bad profits continue

Replacing the "old" chief executive and the Spanish authorized dealer in bankruptcy is only a microcosm of the Li Ning Co's dilemma in the past two years.

Just a month before the Li Ning Co announced Zhang Zhiyong's resignation, the Li Ning Co announced. Fourth quarter order meeting Order completion information and performance warning. In June 12th, according to Lining's announcement, the company's orders in the fourth quarter showed a high double-digit decline. Among them, the order value of footwear products showed a low double-digit decline, and the average retail price and order quantity had low unit number and low double-digit decline respectively. In terms of clothing, the amount of orders has fallen by more than 20%.

According to the results of the order meeting, management expects sales growth in 2012 to be negative compared with 2011. In view of the reasons for the decline in orders, Li Ning Co explained that the main hope is that the inventory will return to normal level at the end of the year. Li Ning Co admits that the sports industry is facing fierce competition and increased discount sales. The pressure of retail end inventory is still serious.

In fiscal year 2011, the company's annual report showed that the stock at the end of 2011 was 1 billion 133 million yuan, an increase of 40% compared with the total inventory data of 805 million yuan in the same period of 2010.

In February 6th, Li Ning Co announced the plan of personnel and organizational restructuring aimed at focusing on core business. It is called improving operational efficiency and improving net profit margin. The company will optimize the organizational structure of some non core business departments, reduce personnel costs and invest resources in the core business of the group.

Although Li Ning Co denied the idea of mass layoffs at that time, the intention of the company to break arm and stop bleeding was obvious. Deutsche Bank's research estimates that the cost of staff accounts for about 10% of Li Ning Co's sales, and the implementation of streamlining measures is conducive to the improvement of Li Ning Co's net profit margin. According to the Li Ning Co plan, the proportion of human cost in group sales is projected to decrease by about 0.5 percentage points in 2012.

The personnel adjustment is another major change in personnel since the company's personnel earthquake broke out in May 2011. At that time, Zhang Xiaoyan, director of the government and external affairs of Li Ning Co, confirmed to our reporter that the company's chief operating officer, Guo Jianxin, chief market official Shiwei and director of e-commerce Department Lin Ling, have resigned.

Sharp organizational changes and personnel changes lasting for 1 years have made Li Ning Co's performance decline significantly. According to the 2011 Annual Report, Li Ning Co sales and net profits both fell, with sales revenue falling from 9 billion 478 million yuan to 8 billion 928 million yuan, and net profit dropped from 1 billion 100 million yuan to 65% yuan to 380 million yuan.

　 Improper decision making

The downward path of Li Ning Co has nothing to do with the misconduct of team decisions led by Zhang Zhiyong.

Zhang Zhiyong began in 2002 in the second ten years of the Li Ning Co. At that time, he was the chief executive officer of the company. At that time, China's sporting goods industry continued to heat up, and Zhang Zhiyong led Li Ning Co sales to break through 1 billion yuan.

Since then, in 2008, Lining himself lifted the Li Ning Co to the summit in the "fire" of Beijing Olympic Games. The 2009 annual report shows that the company achieved sales revenue of 8 billion 387 million yuan in the current period, catching up with the sales data of Adidas in China.

After 2010, Li Ning Co quickly entered the downstream channel. In December 20, 2010, Li Ning Co within a day Price of stock Down 23%, the market value evaporated nearly HK $4 billion 500 million, the worst decline since Lining listed in 2004. The fuse is Li Ning Co's orders for orders in the second quarter of 2011 increased by 20% in the same period of the overall market growth, which is far below the 22% in the second quarter of 2010.

Regarding this, Wang Yiming, a senior consultant in sports marketing, said that with the rapid growth of China's sporting goods, the adjustment period has entered a period of adjustment. The stock pressure of the whole industry is huge, but Zhang Zhiyong has not come to light from the splendor of 2008.

　　 Weakness is presented to the opponent.

Also in June 2010, Li Ning Co launched a younger brand remodeling campaign. In the process of brand remolding, in September 2010, Li Ning Co's channel reform was carried out synchronously. At that time, Li Ning Co had a total of more than 1700 distributors. The goal of Li Ning Co was to integrate 400 distributors by the end of 2011.

Wang Yiming said that the brand reinventing poor communication, hurting consumers, huge inventory pressure and hurting dealers' interests. In addition, the timing of supplier integration is not appropriate, making the Li Ning Co crisis erupted in 2010 and continued to become more serious in 2011.

In the Li Ning Co, adverse changes are also growing. Former Li Ning Co insiders said that after 2008, many things changed quietly. Among them, the core values change significantly, the company does not have the "strength to one place" cohesion, "people move" style of work is obvious.

In addition, Li Ning Co's strategy of focusing on core business began to wobble. Over the years, apart from the main brand "Lining", Li Ning Co has formed a brand combination of "red double happiness", "Lotto" and "Ai Gao". Take "Lotto" authorized by Li Ning Co as an example, in 2010, the profit was 91 million 749 thousand yuan.

Lining admitted that the company experienced difficulties in the past and will not be easy in the future. Wang Yiming said that Li Ning Co returned to the original point of sponsoring the Chinese men's Basketball League after 7 years, which is equivalent to a new crossroads.